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Article Excerpt
Abstract
Customer-centric Web-based systems, such as e-commerce Web sites, or sites that support customer relationship management (CRM) activities, are themselves information systems, but their design and maintenance need to follow vastly different approaches from the traditional systems lifecycle approach. Based on marketing frameworks that are applicable to the online world, and following design science principles, we develop a model to guide the design and the continuous management of such sites. The model makes extensive use of current technologies for tracking the customers and their behaviors, and combines elements of data mining and statistical analyses. A case study based on a financial services Web site is used to provide a preliminary validation and design evaluation of our approach. The case study showed considerable measured improvement in the effectiveness of the company's Web site. In addition, it also highlighted an important benefit of the our approach: the identification of previously unknown or unexpected segments of visitors. This finding can lead to promising new business opportunities.
Keywords: Web site analysis and design, customer segmentation, personalization
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Introduction
Understanding the end users and their requirements has been the cornerstone of information systems analysis and design. Understanding the factors that lead to user acceptance has received abundant attention by the information systems research community (see for example, Barki and Hartwick 1994; Davis 1989). Most of the time, end users are a well-defined category, either comprising a specific segment of internal constituents (sales force, human resource, etc.) or well-known segments of the extended enterprise of suppliers and customers. User participation, before and during the implementation of information systems, and training are fundamental in facilitating acceptance and increasing the utilization of the systems (Green and Hughes 1986; Lee et al. 1995; McKeen et al. 1994).
Another characteristic of the more traditional system development lifecycle of information systems is system maintenance. Aside from corrections and debugging that might take place after the system is released, major upgrades or new versions are released very infrequently. In other words, the cycle for incorporating major changes is relatively long. Gaps that are identified between the end users' objectives and motives toward the system and the functionalities that the system actually delivers can only be addressed at very infrequent intervals.
Customer-centric Web-based systems, such as e-commerce Web sites, or sites that support customer relationship management (CRM) activities, are themselves complex, multicomponent, multitier information systems, but their design and maintenance need to follow vastly different approaches from the traditional systems lifecycle. While some of the end-users may be either current customers or potential customers, many of them are non-transactional visitors, often anonymous, that are part of the Internet user population at large. These users may display a wide variety of preferences and motives toward the site, which are very difficult to capture.
The Internet environment is a marketing channel for which Hoffman and Novak (1996) articulated a need to understand both the transaction and non-transaction activity. Non-transaction activities entail experiential components, whereas transaction (shopping, online banking, etc.) activities are more goal-oriented. Hoffman et al. (1996) classified sites into online storefronts, Internet presence sites, content sites, malls, incentive sites, and search agents. An early analysis of these categories indicated that only 18 percent of the sites were online storefronts while the remaining 82 percent were informational or Internet presence sites (Kaul 1995). The prevalence of the experiential, non-transactional activities conducted on non-transaction site types in the early commercialization years of the Internet continues to be the pattern, as recently demonstrated by Greenspan (2002): while 59 percent of online visitors conduct transactions, their primary activities continue to be information and communication based.
The design and administration of Web sites visited by the non-transactional user remain a challenge due to the difficulty in obtaining design requirements from these potential visitors. Their direct involvement during requirements definition and their training as end-users are usually not viable options. One can only successfully listen to the "voice of the customer" when there are well-understood site audiences, as demonstrated by an interesting study conducted by El Sawy et al (1999).
The Web environment is implicitly highly dynamic, defying customary geographic and temporal information systems design assumptions. In addition, a Web site is, in essence, competing with various other web sites trying to attract and capture the visitors, which introduces new market dynamics. It is critical to conduct continuous assessment of potential gaps between intentions of users and the delivered experience by the site to maintain its utility. This implies continuous management and updates of content and interaction, as opposed to the sporadic version release paradigm of traditional software development environments.
We consider Web site design and its continuous redesign as a complex product design and product update problem. We see the product itself as a multidimensional set of possible visitor experiences that the firm wants to enable. Each such experience might have been determined by very different motives expressed by very different individuals. On top of all of this, we consider the requirement of real time assessment of gaps between the visitors' intentions and motives and the site offerings. This may lead to constant site redesign and updates. The framework and methodology we propose are intended to address this very complex product design problem when the users of the product are not well understood in advance.
In this paper, our goal is to propose an operational framework for continuous redesign, especially for non-transactional sites. While much of what we propose can be used for transactional sites, our approach also works for non-transactional sites, an area of research that has not attracted much research. Our basic research premise is that the design and maintenance of customer-centric Web sites need to be based on a customer-focused approach. Therefore, we propose a Marketing centric approach to design and maintenance of such Web sites using a framework that we refer to as GIST: Gather-Infer-Segment-Track. In devising and evaluating the proposed framework, we follow the principles of design science and follow the seven guidelines of design science research as suggested by Hevner et al. (2004).
The collaboration between the Information Systems and Marketing disciplines is not new; however, it has become more tightly coupled as role of the Internet is increasingly examined in applied and scholarly research. As Hong et al. (2002) state, e-commerce systems are both an information system and a marketing channel. Each discipline views the electronic environment through its own theoretical frameworks or lens. Further, Stafford (2003) sees the marketing view as more product-oriented and the information systems or technology view as more of a development concept. These multiple perspectives have led each discipline to claim different aspects of the e-commerce paradigm.
The marketing discipline's contribution to the IS new concept development lens is its identification of "and meeting human and social needs ... profitably" (Kotler 2003, p. 3). More specifically, marketing requires understanding the customer's (either a consumer or business) expectations from the firm and delivering products or services that meet or exceed these expectations. This, coupled with the IS lens for understanding the end users' requirements (the cornerstone of information systems analysis and design), creates a powerful approach to understanding and designing customer-centric Web sites. However, surprisingly very little research has focused on integration of the two lenses.
To the best of our knowledge, GIST is the first practical methodology that combines marketing research findings for the online context that identifies determinants of customer satisfaction, loyalty, and retention with the development cycle principles from information systems. We incorporate several appropriate marketing frameworks into the GIST design. Our focus is on transforming existing marketing models for the online environment by leveraging the real-time and offline behavior of visitors, identify gaps in their expectations, and redesign the site to minimize or eliminate these gaps.
In the next section, we overview how the design science framework outlined in Hevner et al. was used to guide the development of our research artifacts that constitute the proposed framework. The following sections introduce the specific constructs and conceptual approaches that led to the GIST methodology's development and the information architecture that is available to implement the methodology. We follow with detailed descriptions of each of the stages of GIST: Gather-Infer-Segment-Track. We conclude with a case study of a Fortune 50 company that provides proof-of-concept for GIST.
A Design Science Approach
In their recent article, Hevner et al. (2004) provide a general framework to guide IS researchers and practitioners on how to conduct, evaluate, and present design science research. We believe the work presented in this paper exemplifies the approach and evaluation criteria presented in their work. Below we present an outline of how various components of GIST relate to the guidelines presented in Hevner et al.
* Design as an Artifact. The methodology we develop is itself the artifact that is created to address the important problem of designing and redesigning customer-centric Web sites in the presence of non-transactional visitors. The methodology consists of multiple steps: Gather-Infer-Segment-Track, for which specific artifacts were developed. The combined artifact of these steps is a dynamic Web site design for a non-transactional Web site, described in the case study.
* Problem Relevance: As stated in the Introduction, the problem of designing and redesigning customer-centric Web sites is extremely relevant. This is a problem that very significantly highlights the interplay among business strategy, IT strategy, organizational infrastructure, and IS infrastructure. The case study we present to evaluate our methodology further illustrates all of these aspects.
* Research...
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